South Korean government officials have reached a decision to impose a 20 percent tax on all crypto gains. The new regulations will be put into force in 2022. Profit from digital coin transactions will be classified as “miscellaneous income”, and will have to be reported in the May 2023 general income taxes reports.
The plan to act so swiftly was originally announced sometime earlier in 2021 during a vice-ministerial interagency summit, that was overseen by Koo Yoon-Cheol, head of the government policy coordination.
It was decided then that the South Korean Financial Service Commissions (FSC) will be the central watchdog to regulate the nation’s crypto ecosystem. The FSC is the official South Korean financial and FX regulator.
This move comes at a very sensitive time, during a general political effort to delay any sort of crypto taxation, due to the upcoming national elections. Political parties wish to engage young people into the vote, and what better way than exempting them from crypto taxes?
However, local analyst platforms and media outlets predict that young voters will be, nevertheless, casting their votes in favor of the Democratic Party, the nations leading political force. The issue of crypto regulation thus remains a hot spot for political debates, and there was even a crisis meeting held in order to discuss ways to loosen the grip around the forthcoming crypto regulations and taxes.
Meanwhile, this news echoes what we reported a while ago concerning South Korea’s plans to eradicate all local illegal cryptocurrency transactions by means of tracing every crypto transaction in the nation.